Return to Article: TSP board backs budget hike for tech upgrade
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33946
Numbers Man, you out there? I'd really appreciate your take on G.Grindle's assertions.
Hating to show my ignorance but as my co-worker stated, "It's all only worth what it is when you take it out. All of these are just paper gains and losses." I acknowledge that fully reallocating an account sounds likely to incur more cost but that may be merely one transaction versus several. Could that be saving us money instead of losing? Could the ability (or SOP) to pull shares on a FIFO basis be more cost effective? As it is right now, I don't think we would have to declare capital gains on a comparison basis of purchase versus sale when withdrawing funds. If they switch to a tracking system as G proposes, wouldn't that be likely? Such a situation would be an additional reason for those of us who were fully in the stock funds to ride out this dip.
Regardless, he sounds like he has a valid point and has gotten my interest: I just don't know if there really is a basis. Anyone have more input on this?
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33859
What value added does the TSP participant get? Reduced index expenses?
No.
How about what's truly needed and deserved, and should be part of the RFQ: Provide TSP participants with the means to rebalance their portfolio by FUND and on a First-In-First-Out basis. Provide participants with a means to download transaction data to Quicken and MSMoney so that wise decisions can be assessed and made.
Currently, a TSP participant who rebalances any of his-her portfolio is forced to SELL ALL holdings that day and purchase ALL NEW HOLDINGS based on %-allocation weightings. This is ridiculous and inefficient. It is also something ERISA qualified plans aren't subjected to. Further, that a TSP participant is forced to sell ALL holdings for the most minor intended rebalancing is the TRUE cause to all the trading fees incurred.
Give us what ERISA plans have - FIFO based rebalancing and data downloads for our financial software!
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33351
Reading the comments I noticed that some people were complaining about the upgrade they had in 2003 which was software. The upgrade there proposing now is hardware, something you'll need to do every couple of years due to the growth and the ever expanding amount of services that TSP offers. I've been a couple of 401(k) plans and this one is by far the best. My money has grown on avg 10-15 percent every year I've had it in. No complaints here. By the way kudos to the TSP board by not going along with the real esate funds, bad risk.
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33342
DGS is correct. The TSP is dirt cheap, even compared to other index funds, and is a great bargain. Additionally, it gets very good reviews from the financial press. The improvements, as discussed, seem common sense; are you all saying that the TSP shouldn't upgrade obsolete software, be able to handle a high volume of transactions, or be resilient in case of a catatrophic incident? Take a deep breath and relax, your federal retirement fund is in responsible hands.
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33332
You do realize this is a direct result from the huge transaction cost they had when the market fell 400 points or whatever it was in August and people pulled their money out of the stocks and put it into bonds. So they are going to pass these costs on to the users one way or another... Here they are making sure they don't get hit with a $7M cost in a single day when a huge number of people react to the market movement (which is an error in its own right) and pull their money out after the market move has been made. Additionally, how many people are investing money in TSP? You all complain about $20M, and it does sound like a lot of money, but in reality when it is spread out over all the users, how much does it end up being? Especially as compared as a percentage of the money you have invested. All funds have an operating cost, and TSPs is extremely low. I hate when stuff like this comes out and everyone complains about it. Yes it is a large amount of money, but on a per person basis - especially when compared to their total portfolio worth, this is peanuts...
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33327
Hopefully this upgrade will allow the TSP to offer more fund choices to participants. The private sector 401Ks have way more choices than the TSP.
The secretive TSP board (does anyone know how you actually get on this board?)has failed federal employees when it comes to this issue.
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33322
It seems I recall that it was just a few years ago that the TSP spent tens of millions having an incompentent contractor upgrade their sytems, only to see much time and money wasted and the contractor sued for going way over budget and failing to fulfill the contract. The suit ended up only recovering a small amount of our money spent/wasted. Another contractor had to be hired (at additional significant cost) to supposedly finish the work. I know technology changes rapidly, but are we (the TSP) investors going to be asked every couple of years to expend millions more of our money on endless (and mayber not really necessary) expensive upgrades and changes. I agree with others, we don't need a fancy web site or a lot of expensive bells and whistles, just a dependable and functional system. The TSP is for long term investment and I appreciate the low expense costs that come with some of its limitations. And we need to keep them low. For those who want to "play" the market, there is nothing stopping them from doing so on their own outside of the TSP. The TSP is a "good thing". Lets not blow it!
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33316
They had better have oversight on any IT contracts for the new technology. We got stuck with a $36 million dollar cost overrun on the last go-around with a company from VA. Don't hire that company. Also why such a small decrease in 2009? $15m a year for hardware and software licenses means someone is already planning to skyrocket the costs of this IT work. Board members nor any TSP employees should have any ties to any IT contractor. I wonder how the payroll will be affected by this huge increase in the budget.
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33308
I don't think enough time and money has been spent on managing the fund as well as making the system work faster. This is only a drop in the bucket and believe TSP should be spending this kind of money on up grades every year
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33295
I think the board overseeing the federal employee Thrift Savings Plan should remember that the money they are budgeting is the TSP participants. They need to account for every cent of the money spent. They also need to address the needs of the TSP participants. We don't need any fancy new web site design the one we have is great. We also need to have easier access to our money like it used to be when you were able to have two general purpose loans at a time. I don't mind paying the $50.00 fee, but I do mind not having access to borrow what is mine. I also totally agree with Don's comments.
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33289
WOW!! Sounds a bit pricey-- As one of your customers I would like a line item breakdown of all expenses. A lot of overhead without any real ROI.
Also, to echo the first respondant- what are the stocks/ bonds for each fund. Finally, how do you choose the investments-- do you follow Goldman Sachs investments, hired an investment firm, or have qualified investors?
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33279
Seems to me that now would be a prime time opportunity to factor in the computing models and all the necessary automation required for that Roth fund, that was estimated to cost 10 million.
Might as well get all the bang for the buck we can.
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33272
A word to the wise: Before dispensing our hard-earned cash on this tech upgrade, consider the details. When dealing with IT contractors/consultants, maintain strict oversight, hold them to concrete milestones, avoid CONFLICTS OF INTEREST, and audit the entire process. Beware of the terrible mistakes and mis-management logged by other tech upgrade attempts by FBI, FAA, TSA, IRS, etc. Move carefully and deliberately, led by committed project management, not by those profitting from the venture. Also, refuse to be dazzled by bells and whistles, tech solutions should get the required job done and nothing more. Above all, refuse to compromise generally accepted accounting principles in favor of the "best practice" of the day...these are only shortcuts making the job easier for the sellers of products and services. The potential impact on accountibility and fiscal integrity can be devestating. I have SEEN it with my own eyes...I cannot be the only one.
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33264
Is there a way to find out a break down of how all this money is spent?
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33248
It seems like we have heard this before. Somebody needs to get on with the work at hand and not just increase the funds taken from our accounts. Where is the great system that is in place now instead of changing the protocols all of asudden.
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